Inter-Korean tour earnings not subject to U.N. sanctions: gov't

SEOUL, March 7 (Yonhap) -- Cash earnings from an inter-Korean tour project would not be subject to United Nations sanctions on North Korea, Seoul's unification ministry said Friday, amid growing expectations for its resumption.

The U.N. Security Council last year adopted two resolutions against Pyongyang following its nuclear rocket tests, banning bulk cash couriers to the country, a frequently used method to move illicit funds into the nation slapped with several economic sanctions.

The sanctions are aimed at blocking the illicit money from being funneled into the country for use in the development and proliferation of its nuclear weapons program.

Questions have risen whether North Korea's earnings from a joint inter-Korean tourism project in the North's eastern mountain region would violate the resolution banning the transfer of bundles of cash to the wayward country.

"In the ministry's understanding, (bulk cash banning) is aimed at curbing attempts to transfer illicit funds through hand-carrying with the purpose of circumventing bank trading," the ministry said in a written response to independent lawmaker Park Joo-sun's questionnaire regarding the Kumgang tour program and the U.N. sanctions.

Also asked whether the bulk cash restriction applies to commercial transactions over the banking system, the ministry said, "Given the purpose of bulk cash banning in the UNSC resolutions, normal dealings through the banking system are not relevant in our understanding."

The U.N. has not detected any violations of bulk cash banning so far, while the Kumgang tour program has not been discussed as a possible violation, according to the ministry's response to the lawmaker.

The ministry's stated stance cleared some legal doubts cast over the prospect of the two Koreas' resuming talks to reopen the long-suspended joint program.

South Korean firms, including industrial conglomerate Hyundai Asan Corp., which used to operate the tour program and resort facilities around the North Korean mountain, used the banking system for their business dealings.

The two countries started the symbolic inter-Korean economic cooperation project amid a growing reconciliatory mood on the peninsula in 1998. But the tour program came to a sudden halt in late 2008 when a South Korean tourist was shot dead by a North Korea soldier guarding a restricted area.

Pyongyang has since repeatedly called for the resumption of the cash-cow business, with Seoul demanding that the North should first guarantee the security of South Korean tourists before the program could resume.

Amid recent warming of inter-Korean relations, as shown in recent family reunions hosting and high-level cross-border contact, the possibility of a Kumgang tour resumption has become a frequently discussed topic here.

Seoul's foreign ministry, meanwhile, has previously said that it would have to ask for an authoritative interpretation from the U.N. before making clear its stance on the issue.